UKDC GOING FORWARD — END OF YEAR REVIEW 2013

As a legal costs insurer it is clear that controlling the cost of litigation is of crucial importance to the Association. In July, 2012 a Circular was issued to the Membership on the "Effective Management of Claims and Control of Costs" which highlighted the importance of the accurate estimating of costs. In recent years the Board has seen a number of costly cases where lawyers have significantly underestimated the costs to be incurred in resolving the dispute.

Whilst estimating is not an exact science, the accurate estimating of costs is crucial and the Circular highlighted that if it becomes apparent that an estimate is likely to be exceeded then the service provider must raise this with the Managers at the earliest opportunity. Furthermore, in the case of an inadequate or inappropriate estimate the service provider will be expected to honour the estimate previously given unless there are mitigating circumstances. Through their Value For Money programme, and ongoing work with Preferred Legal Partners, the Managers continue to do their utmost to control the costs of handling and litigating claims.

This includes requesting lawyers to consider alternative fee arrangements to the usual approach of hourly billing and the use of an independent cost draftsman where appropriate. Historically, this has been limited to assessing the costs incurred by an opponent. However, going forward the Managers envisage using a costs draftsman to review cost estimates and also the fees incurred on certain cases with a view to encouraging a much greater focus on the cost effectiveness of steps being taken...

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